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Question
Bank of the Atlantic has liabilities of $4 million with an average maturity of two years paying interest rates of 4.0 percent annually. It has assets of $5 million with an average maturity of 5 years earning interest rates of 6.0 percent annually.
What is the maximum interest rate that it can refinance its $4 million liability and still break even on its net interest income in dollars?
A. 6.5 percent.
B. 7.0 percent.
C. 7.5 percent.
D. 8.0 percent.
E. 8.5 percent.
Answer
This answer is hidden. It contains 141 characters.
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